Fiscal Foresight and Information Flows

Leeper acknowledges support of NSF Grant SES-0452599. Most of this research was done while Yang was at Academia Sinica. We also acknowledge comments by Troy Davig, Dale Henderson, Beth Klee, Karel Mertens, Ricardo Nunes, Morten Ravn, Chris Sims, and participants at presentations at the Congressional Budget Office, the Federal Reserve Board, the Reserve Bank of New Zealand, Sveriges Riksbank, the Bank of Korea Conference "Recognizing and Coping with Macroeconomic Model Uncertainty in Designing Monetary Policy," the Third International Conference on Macroeconomics in Madrid, UCSD, UC-Irvine, Federal Reserve Bank of Atlanta, University of Auckland, University of Otago, University of Canterbury, and Victoria University of Wellington. We are particularly grateful to Jim Nason and Harald Uhlig for helpful comments. The views expressed in this paper are those of authors and should not be interpreted as those of the Congressional Budget Office nor of the National Bureau of Economic Research.